BRANDS & BRAND MANAGEMENTBRANDS & BRAND MANAGEMENT

Learning objectivesLearning objectives

• Importance of brands• Branding challenges and opportunitiesBranding challenges and opportunities• Brand Equity• Strategic brand management

What is a brand?What is a brand?

• For the American Marketing Association (AMA), a brand is a “name, term, sign, symbol, or design, or ais a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition ”differentiate them from those of competition.

• These different components of a brand that identify and differentiate it are brand elements.differentiate it are brand elements.

What is a brand?What is a brand?

• Many practicing managers refer to a brand as more than that— as something that has actually created a certainthat as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.

f f• We can make a distinction between the AMA definition of a “brand” with a small b and the industry’s concept of a “Brand” with a capital b.Brand with a capital b.

Brands vs ProductsBrands vs. Products

• A product is anything we can offer to a market for attention, acquisition, use, or consumptionfor attention, acquisition, use, or consumption that might satisfy a need or want.

• A product may be a physical good, a service, a p y p y gretail outlet, a person, an organization, a place, or even an idea.

Five Levels of Meaning for a Product

• The core benefit level is the fundamental need or want that• The core benefit level is the fundamental need or want that consumers satisfy by consuming the product or service.

• The generic product level is a basic version of the product containing only those attributes or characteristics absolutelycontaining only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features. This is basically a stripped-down, no-frills version of the product that adequately performs the product function.

• The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. Th t d d t l l i l d dditi l d t tt ib t• The augmented product level includes additional product attributes, benefits, or related services that distinguish the product from competitors.

• The potential product level includes all the augmentations and• The potential product level includes all the augmentations and transformations that a product might ultimately undergo in the future.

• A brand is therefore more than a product, as it can have dimensions that differentiateas it can have dimensions that differentiate it in some way from other products d i d t ti f th ddesigned to satisfy the same need.

• Some brands create competitive padvantages with product performance; other brands create competitiveother brands create competitive advantages through non-product-related meansmeans.

Importance of Brands to ConsumersImportance of Brands to Consumers

• Identification of the source of the product• Identification of the source of the product• Assignment of responsibility to product

maker• Risk reducer• Risk reducer• Search cost reducer• Promise, bond, or pact with product maker• Symbolic device• Symbolic device• Signal of quality

Reducing the Risks in Product Decisions

C i diff t t f i k i• Consumers may perceive many different types of risks in buying and consuming a product:

• Functional risk—The product does not perform up toFunctional risk The product does not perform up to expectations.

• Physical risk—The product poses a threat to the y p pphysical well-being or health of the user or others.

• Financial risk—The product is not worth the price paid.S i l i k Th d l i b• Social risk—The product results in embarrassment

from others.• Psychological risk The product affects the mental• Psychological risk—The product affects the mental

well-being of the user.• Time risk—The failure of the product results in an p

opportunity cost of finding another satisfactory product.

Importance of Brands to FirmsImportance of Brands to Firms

• To firms, brands represent enormously valuable pieces of legal property, capable p g p p y, pof influencing consumer behavior, being bought and sold and providing thebought and sold, and providing the security of sustained future revenues.

Importance of Brands to FirmsImportance of Brands to Firms

• Identification to simplify handling or tracing• Identification to simplify handling or tracing• Legally protecting unique features• Signal of quality level

Endo ing prod cts ith niq e• Endowing products with unique associations

• Source of competitive advantage• Source of financial returns• Source of financial returns

Can everything be branded?Can everything be branded?

Ulti t l b d i thi th t• Ultimately a brand is something that resides in the minds of consumers.

• The key to branding is that consumers perceive differences among brands in a p gproduct category.

• Even commodities can be branded:• Even commodities can be branded:– Coffee (Maxwell House), bath soap (Ivory),

flour (Gold Medal) beer (Budweiser) saltflour (Gold Medal), beer (Budweiser), salt (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue),bananas (Chiquita), chickens (Perdue), pineapples (Dole), and even water (Perrier)

An Example of Branding a CommodityAn Example of Branding a Commodity

• De Beers Group added the phrase “A Diamond Is Forever”

What is branded?What is branded?

• Physical goods• Physical goods• Services• Retailers and distributors

Online prod cts and ser ices• Online products and services• People and organizationsp g• Sports, arts, and entertainment

G hi l ti• Geographic locations• Ideas and causes

Source of a Brands’ StrengthSource of a Brands Strength

• “The real causes of enduring market leadership are vision and will. Enduring market leaders have a revolutionary and inspiring vision of the mass market, and they exhibit an indomitable will to realize that vision. They persist under adversity, innovate relentlessly, commit financial resources, and leverage assets to realize their vision.”

Gerald J. Tellis and Peter N. Golder, “First to Market, First to Fail? Real Causes of Enduring Market Leadership,” MIT Sloan Management Review, 1 January 1996

Importance of Brand ManagementImportance of Brand Management

• The bottom line is that any brand—no matter how strong at one point in time—is g pvulnerable, and susceptible to poor brand managementmanagement.

What are the strongest brands?

Top Ten Global BrandspBrand 2006 ($Billion) 2005 ($ Billion)

1. Coca-Cola2. Microsoft

67.0056.93

67.5359.94

3. IBM4. GE

56.2048.91

53.3847.00

5. Intel6. Nokia

32.3230.13

35.5926.456. Nokia

7. Toyota8. Disney

30.1327.9427.85

26.4524.8426.448. Disney

9. McDonald’s10 Mercedes-

27.8527.5021 80

26.4426.0120 0010. Mercedes

Benz21.80 20.00

Branding Challenges and Opportunities

• Savvy customers• Savvy customers• Brand proliferation• Media fragmentation• Increased competition• Increased competition• Increased costs• Greater accountability

BRAND EQUITYBRAND EQUITY

• A brand's power derived from the goodwilland name recognition that it has earnedgover time, which translates into higher sales volume and higher profit marginssales volume and higher profit marginsagainst competing brands.

The Brand Equity Conceptq y p

• No common viewpoint on how it should be conceptualized and measured

• It stresses the importance of brand role inIt stresses the importance of brand role in marketing strategies.

• Brand equity is defined in terms of the• Brand equity is defined in terms of the marketing effects uniquely attributable to the brandthe brand.– Brand equity relates to the fact that different outcomes

res lt in the marketing of a prod ct or ser ice beca seresult in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.or service did not have that name.

Strategic Brand ManagementStrategic Brand Management• It involves the design and implementation of

marketing programs and activities to build, measure, and manage brand equity. , g q y

• The Strategic Brand Management Process is defined as involving four main steps:1 Identifying and establishing brand positioning and values1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs

3. Measuring and interpreting brand performance

4 G i d t i i b d it4. Growing and sustaining brand equity

Strategic Brand Management ProcessStrategic Brand Management Processg gg g

Mental mapsCompetitive frame of referenceP i t f it d i t f diff

Key ConceptsSteps

Identify and establishPoints-of-parity and points-of-differenceCore brand valuesBrand mantra

brand positioning and values

Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Plan and implement brand marketing programs

Brand value chainBrand auditsBrand tracking

Measure and interpretbrand performance Brand tracking

Brand equity management system

Brand-product matrixB d tf li d hi hiGrow and sustain

p

Brand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

Grow and sustainbrand equity

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